SBP exempt from paying property tax in Cantt areas, LHC rules.

LAHORE -- The Lahore High Court has ruled that the State Bank of Pakistan (SBP) enjoys exemption from property tax on its imAmovable properties situaAted in cantonment areas.

Justice Jawad Hassan issued the ruling allowing a petition of the SBP challeAnging the levy of property tax by the Chaklala CantonAment Board, Rawalpindi and seeking an exemption under Section 99(2)(f) of the Cantonments Act, 1924.

The SBP through a counsel pleaded that it was a corporation but not a commercial entity like the National Bank of Pakistan or any other commercial/scheduled bank or financial institution.

The counsel argued that by granting property tax exemption to the SBP, no discrimination will be caused to any entity. He said over the years there have been many amendments in the functions of the SBP which justify its claim for grant of exemption from payment of property tax under the Cantonments Act.

He contended that the SBP, by virtue of its powers and functions, was wholly owned by the federal government and performed functions on behalf of the government and was also mentioned in the Fourth Schedule, Part I, Federal Legislative List at Item No. 28 of the Constitution and these functions have been given to the central bank through an amendment made in the act as well as other applicable laws.

Besides questioning the maintainability of the central bank's petition, a counsel for the board argued that the SBP was a corporation, hence, it was not entitled to property tax exemption. He also said that the bank estopped by its own conduct to claim exemption because payment of tax had already been made by its other office.

In his 23-page judgement, Justice Hassan observed that the functions of the SBP are functions of the federal government because the regulatory powers conferred on it, through the SBP Act as well as other laws, cover a broad range of areas which play a vital role in the country's economy.

Looking into the ownership of share capital of the SBP, the judge noted that since promulgation of the...